Revista de Educação e Pesquisa em Contabilidade (Sep 2012)
RESEARCH AND DEVELOPMENT AND STOCK PRICES OF BRAZILIAN COMPANIES: AN EMPIRICAL STUDY
Abstract
The aim of the present study is to identify the relationship between spending on research and development (R&D) and the stock price of Brazilian companies listed for trading on the São Paulo Stock Exchange (Bovespa), following on the studies of Lopes (2001;2002) and Rezende (2005) about the value-relevance of accounting information in Brazil. This empirical-analytic study was based on the model of Collins et al. (1997), which is a proxy for the Residual Income Valuation (RIV) model of Ohlson (1995), and on the classification of technological intensity in the study of Chan et al. (1990), carried out in the United States. The sample consisted of Brazilian firms with shares traded on the Bovespa between 1996 and 2006. By means of multiple regressions we identified that R&D spending is not statistically significant for the stock prices of the firms analyzed. These conclusions do not corroborate the findings of Chan et al. (1990), but do provide support for the studies of Ohlson (1995) and Lopes (2001; 2002) and complement the study by Rezende (2005), since our results indicate that earnings is statistically significant for stock price, with a positive relationship even after deducting R&D spending accounted for as expense. The situation is different for book value, which ceased being statistically significant and being related with stock price after deducting R&D spending accounted for as investment.
